What is a market correction?
A drop of 10 percent or more from a recent high. Corrections are normal, happen about once a year on average, and usually recover within a few months.
A correction is the market’s term for a fall of at least 10 percent from its most recent peak. Anything under that is just a dip; anything over 20 percent gets promoted to a bear market. The word was chosen to sound calm, and for once the jargon is accurate: corrections are routine.
How routine? The S&P 500 has had a 10 percent pullback in most years since the 1950s, often more than one. The typical one lasts a few months from peak to recovery. Most of them, in hindsight, are hard to even name; they were bumps on the way to the next high.
What triggers them varies: a rate hike, a scary inflation print, a geopolitical shock, or sometimes nothing anyone can identify, just a stretch where prices had run ahead and sellers took the excuse. The trigger matters less than the pattern, which is that they resolve.
For a long-term investor, a correction is closer to a sale than a crisis. Automatic monthly contributions quietly buy at lower prices. The main thing to avoid is turning a 10 percent paper decline into a real one by selling.
Informational only, not financial advice. Updated September 4, 2026.
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